This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Delivered on:

16 July 2012 (Transcript of the speech, exactly as it was delivered)

Transcript of the speech given by the Prime Minister and Deputy Prime Minister in Birmingham on 16 July 2012.

Prime Minister

Good morning everyone, and welcome. We got you here to help the headline writers with sharing platforms, minding gaps, trains on track and I am sure you will think of some others; no, the real reason for being here is that this is the next stage in the biggest investment in our rail network since Victorian times.

Already as a government, we have put in place £18 billion of investment by March 2015. Today we are announcing accelerated investment by network rail beyond that, with over £9 billion of investment between 2014 and 2019. We are creating a fast, modern, reliable railway with more capacity and cleaner electric trains. It is about getting people, and of course freight, off the roads and onto the railways.

While just ten miles of track were electrified in the last 13 years, we can commit to over 850 more miles of electric railway by 2019. By the time this is complete, around three quarters of all rail journeys in England and Wales will be made on electric trains. Here in Birmingham, we are already transforming New Street station with High Speed 2 to come as well. Today we are announcing more capacity and electric lines for the region.

There is good news for Wales, where we are committing to electrify the line all the way to Swansea and into the Welsh valleys. In the Midlands I can announce that we are electrifying the midland main line, from Sheffield to London. This has been talked about for years, actually decades, but it is this government that has got the finance and is really getting things moving.

In the North, we are committed to delivering the Northern Hub transformation, which will see a massive improvement in services between Liverpool, Manchester, Leeds and Sheffield.

In the South East, as well as Crossrail - which is of course the biggest construction project anywhere in Europe - London and the South East will receive an extra £700 million to support the capital’s economy and allow an extra 120,000 commuter journeys every day.

Heathrow airport will get a much needed direct connection to the West - again something that has been talked about a lot, which is now being delivered - so that trains from the West Country and Wales can reach the airport directly.

There is more to come this week, with the Chancellor and Chief Secretary setting out plans to use the strength of the government’s balance sheet to support further investment in the country’s infrastructure. We can do this only because we have a credible deficit reduction plan that is trusted and allows us to invest for the long-term.

I would argue that this is just one aspect of the long-term mission of this coalition government. Of course the coalition has come into question, some asking whether it has real momentum for the rest of this Parliament; others even asking whether it should end. I just want to say I am even more committed to making this coalition government work today than I was in May 2010 when Nick Clegg and I formed this government. I believe it has real purpose, a real mission.

I do not just believe this because the world has become even more dangerous and difficult than 2010, although it undoubtedly has; switch on your television sets and you can see weak governments being buffeted by events and economic difficulties. It is vital that this government has the majority, has the decisiveness, and has the strength to keep our economy safe, to cut our deficit - which we have done by a quarter in two years - and to have all the drive that we need for economic growth in the years ahead.

I would argue that as well as that clear justification, because of economic difficulties and uncertainties, there is also, I think, a huge momentum in this government behind the agendas that the Liberal Democrats and the Conservatives share.

We are both absolutely committed to rebalancing our economy; it became too dependent on finance, on the South East, on the public sector and we need jobs and growth from the private sector that I think is absolutely vital. 800,000 new jobs in the private sector since May 2010; last year the best ever year for establishing new businesses in Britain, but frankly there is much more we need to do to rebalance. Both parties are committed to that.

Both parties are also absolutely committed to driving aspiration and giving people life chances in our country by reforming education. We announced last Friday an extra 100 free schools; something governments of one party have never done, breaking open the state monopoly of education, providing great new schools, great new education for children, real rigour in terms of discipline, exam standards, helping people to achieve their potential.

Another absolutely shared mission is what the Deputy Prime Minister calls ‘alarm clock Britain’, what I call being on the side of people who work hard and want to get on, is reforming welfare so that it actually pays to work rather than not to work. We have capped welfare; we are introducing universal credit so you are always better off in working and always better off if you work more.

I also believe there is a shared agenda on making sure that Britain stands tall in the world. We will complete the united [..indistinct] over the mission that we carried out with allies in Libya, which has resulted in the first free elections in that country for over four decades. We stand together for freedom and democracy in Syria. We back Britain’s expanded aid budget, to make sure that Britain has a moral purpose in the world but also to safeguard our interests.

Those are just some of the areas I would mention where there is a great common interest, a driving mission, for this government. I would argue that we have achieved some things in two years that have eluded single party governments that have been in office for over a decade.

We were always told, ‘You can’t reform public sector pensions’; we have, and we have cut that cost by almost a half. We are always told, ‘You can’t reform welfare’; we are well down that track. We have also grappled with difficult subjects like higher education reform, to make sure we can go on having well-funded universities that will serve our economy and young people in the future.

There is much more to come on all of these agendas; we will be publishing a midterm review at the end of the summer, as we go into autumn, looking at the things we have achieved so far and also setting out the next goals and objectives of things this coalition government wants to achieve in the remainder of this Parliamentary term.

I say this Parliamentary term, because that is what this government is for. I think it is important we have that fixed term, we have that fixed government; people know, the markets know, businesses know there is strong decisive government throughout this term.

What has driven this government is a view that we need to get things done, a view that we need to safeguard the British economy in difficult times but above all that what we do is about the national interest. That is what drives the Deputy Prime Minister and me; that is what this government is all about; that is its foundation.

I think today, with this big rail announcement, is yet another example of a long-term decision that will strengthen the British economy and also strengthen our society too. That was all I wanted to say, Nick over to you.

##Deputy Prime Minister

Thank you. I think that the reasons why this coalition government was formed, and the purpose of two parties coming together to form a coalition government, are as strong today, if not stronger arguably given all the challenges we face, than they were back in May 2010.

Sure, we are two different parties. He does not agree with all of my opinions and I do not agree with all of his opinions; that is coalition government. It is tough also, of course, to be in government in difficult times; it is not always a walk in the park or in the rose garden.

Of course you also get some bumps in the road in the Westminster village, as we did last week on House of Lords reform. House of Lords reform happens to be one of those things that gets politicians really hot under the collar in the Westminster village, particularly those who are opposed to change. It always has done, and I imagine it always will.

None of that will stop us from continuing to govern in the national interest, for the whole country. Above all, that means accepting that there are no simple, quick, easy shortcuts that secure instant, political popularity. In fact, I think something that we have accepted in government in this time is that we need to put short-term popularity to one side and get on with making the big long-term reforms and changes that this country so desperately needs.

I would single out two big areas, where those challenges are greatest for us as a nation: firstly economic renewal and secondly social renewal. On the economy, I think one thing that I have certainly learned over the last couple of years is that the crisis that took place in 2008, when the banks blew up, with hindsight I think we now realise that it was not just a crisis of the banks; it was not just a crisis in the government’s finances; it was not just about a black hole in the public finances; in many ways, it was much more serious than that altogether.

It was a crisis of an unbalanced economic model, where the North/South divide continued to grow, even in the good times. It was a crisis of young people without sufficient skills to participate in our economy. It was a crisis of a lack of proper infrastructure in transport, in housing, in energy. It was also an ethical crisis in which irresponsible capitalism took root right of the heart of our economy.

That is why what we are about is not just fixing the black hole in the public finances, important though that is, not just fixing our sick banks, important though that is; it is a lot more besides. It is about getting shareholders to hold people in the boardroom to account so there is proper responsibility in the boardroom. It is about spreading the idea of a John Lewis-style economy so that everybody has a stake in the companies in which they work. It is about expanding the number of apprenticeships on a scale not done in a generation - we will be delivering quarter of a million more apprenticeships during this parliament.

It is about the youth contract which offers every 18 to 23 year old who is out of work the opportunity to earn or learn. It is about investment in our great railway system, as we have announced today, the biggest expansion in railways since the Victorian era. It is about the Green Investment Bank - the first of its kind anywhere in the world - getting money into the new green, renewable energy infrastructure we need for the new green economy.

Above all, it is about restoring the importance and value of work. That is where the interaction between our welfare reforms and our tax reforms comes in. Changing welfare, so people who have fallen onto hard times and need support get support but it is not a way of life. Our tax reforms - so that the point at which you start paying your income tax gets higher and higher and higher so that millions of people in this country on low and middle incomes will keep more of the money that they earn through their hard work which is why I, personally, attach such significance to that key tax policy of raising the so-called personal allowance in the income tax system.

Social renewal - what do I mean by social renewal? I think something that we both believe in is this: it just cannot be right that for years in this country, thousands if not millions of boys’ and girls’, of youngsters’ fortunes in life are in effect condemned by the circumstances of their birth. Where they were born, who their parents were told you more about how they were going to do in school, whether they were going to get to college or university, what kind of job they were going to do and even how long they were going to live. Everybody in this coalition government wants to see a Britain where every little toddler, every child can live out their dreams, can fulfil their aspirations; can exploit their own talents to the full.

That is why I am very proud that this coalition government is the government that has been pouring more money into helping children when it makes the biggest difference, when they are young. The Pupil Premium - it will be £2.5 billion pounds of extra money provided to all children from all disadvantaged backgrounds in our schools system, across the country by the end of this parliament. I have visited countless schools where I can see the difference it is already making. One-to-one tuition, catch-up classes, giving those children who otherwise would struggle the opportunity to start on the same starting line as everybody in the class, which raises standards for all pupils in the class.

The new entitlement of 15-hours free pre-school support to all three and four year olds in the country and as of next April, most radically of all, for the first time ever little toddlers, two year olds, from the most disadvantaged backgrounds will be receiving 15 hours of free pre-school support. Why are we doing that? Because if you can get those little toddlers to have the self-confidence to mix well with other children, to listen to authority, the appetite to learn before they even hang up their coat on the first day at school, you will be doing more for their life chances than almost anything else that government can do.

So this is a coalition government of two parties doing big, bold, difficult things for the long-term benefit of the country. Come 2015, I do not want people simply to say, ‘Oh this coalition helped us scrape through, helped us through the worst’. I want people to recognise that we made the long-term changes which will make our country a stronger, better and fairer place to live for good. Thank you.

##Prime Minister

Thanks very much, Nick. We have time for questions.

##Question

Given the large scale of the investment that you have announced today with the Midland mainline, is HS2 really necessary anymore with all the disruption it is going to cause?

##Prime Minister

Yes, is the short answer to that. When we originally looked at HS2 it was because clearly Britain needs to have another Western mainline and you have a choice: you either build another conventional one or you build a high-speed one. We looked very carefully at this and came to the conclusion that it was right to get on board the high-speed revolution that is taking over so much of railway systems in the world. We obviously have HS1, which has been a great success in terms of the Channel Tunnel link, so our judgement was that it was right to have the second West Coast mainline as a high speed railway line.

I think that sometimes people forget that that investment would be necessary anyway and when they look at the cost of HS2 they ignore the fact that all you really have to look at is the cost of the high speed part rather than the general cost, which is much less and, anyway, brings great economic benefits. So, yes we are committed to it and that bill will be coming forward shortly.

##Question

Prime Minister, you just said that you are more committed to the coalition than you were two years ago. But isn’t the problem that you are failing to take your MPs with you? The events of the past week or so - I mean, we saw real rancour between Conservatives and Lib Dems in the debate, real hostility and we’ve heard at the weekend, Mr Clegg, that even one of your grandees, Sir Menzies Campbell, said it would be hard for Lib Dems to swallow voting for a reduction in the number of MPs. Isn’t, perhaps, the real reason for this relaunch of the coalition the fact that you, Prime Minister, your party is ten points behind Labour in the polls and yours is roundabout ten points in the polls, and that’s why you want to keep it going?

##Prime Minister

The point I would make is that in two years we have had one or two episodes like last week but, frankly, only one or two. House of Lords reform is a subject that has foxed governments, often one-party governments with huge majorities. This is not an easy subject to deal with so I think, if you look at the health of the coalition, what the government is doing, what MPs of both parties have committed to, my argument is that actually we have taken on challenges that often single party governments have found impossible.

The public-sector pension reform that reduces the long-term costs by a half. These are big, difficult decisions. Reform of higher education - a huge difficult decision but actually meaning that our universities will be well invested in, well provided for long into the future. A subject that single party governments have not been able to deal with, we have taken that forward.

Welfare reform, education reform, health reform - in every area it has not been a lowest common denominator, it has been a bold, long-term reforming government. Now, as Nick says, you always have bumps and scrapes and difficulties along the way - that is the nature of politics, that is the nature of government. It is particularly with House of Lords, you always have to be frank.

There are people on both sides of the argument who are people of principle.
Some of those people have held views, either for or against having elected members of the House of Lords, for a very long time. So, I do not take that as an indicator for the health of the government or its momentum, or its purpose. I think it has real purpose, real momentum and that is what we are committed to driving forward in the months ahead.

##Deputy Prime Minister

The only thing I would add is if what you want to do is curry short-term popularity, do not choose to come into government when you are dealing with the biggest implosion of our banking system ever, the largest peacetime deficit and greater economic uncertainty across the developed world, not just here but across Europe and North America, in living memory. It is not an easy time to be in government pretty much anywhere across the developed world right now.

You cannot sort of duck things just because circumstances are difficult. I think both of us took the decision - I certainly did, my party certainly did, it was a decision taken collectively by my party - eyes wide open, this is not going to be easy, there are going to be ups and downs but we have to do this because it is the right thing for the country in the long-term and I personally think most people I meet as I travel around the country - they might not like this, they might not like that but they are pretty fair-minded, they realise there are not instant solutions for these very profound problems and give or take maybe they do not like this policy or that policy, they think the big building blocks for what we are doing, as I explained on economic renewal, social renewal, is something that does not happen by next Tuesday, it takes a bit of time and we have to show by 2015 we are well on the way to pointing the country towards a better future, which I remain very optimistic we will.

##Question

If you are serious about sticking together, Nick Clegg, why do you not just drop Lords reform? And Prime Minister, why do you not just drop boundary changes? Or alternatively, Mr Clegg could say he would sack any Lib Dem minister who did not vote for the boundary changes; Mr Cameron, you could tell us that you will not promote any Conservative who does not vote for House of Lords reform.

##Prime Minister

I think we probably get on better than most of the people who were at the top of the last few governments we can both remember.

I run the Conservative Party; Nick runs the Liberal Democrat Party. We do not agree about everything. We have to make sure there are proper processes to go through to reach agreements. But we have a very long, strong and thorough coalition agreement, which - if we can achieve all of it - will be a very effective and successful government. That coalition agreement addresses most of the big challenges facing our country.

That would answer your second question, really. What we are committed to in terms of constitutional reform is what is in the coalition agreement. We want to deliver all of what is in the coalition agreement, and that is what we will go ahead and do.

As Nick said, there will always be difficult decisions because there are things that come forward that are not covered by the coalition agreement. What I have found is that we have put in place good ways of trying to reach agreement, whether it is difficult economic decisions, difficult budget changes, difficult changes on immigration policy, welfare policy; we have found a way through all of these things.

Often we have been challenged by the press, ‘Well, you’ll never reach agreement on this policy or that policy’. In the end, actually, we have. It has not been ‘in the end’ in many cases, it has been relatively more rapid than that.

##Deputy Prime Minister

Funnily enough, I was just going to make that last point. I have lost count of the number of learned predictions that I have read, ‘Next week, they will not be able to rise to that challenge’; ‘They will not ever be able to reach agreement on this or that’; ‘The coalition is going to be tested to destruction by this vote or that vote, or that announcement, or that announcement’. Every single time, in close to two and a half years now, we have confounded the sceptics and the critics.

I have always understood that being the two leaders of something which is new: a coalition government, a proper coalition government for a full five years, is not going to sit very easily with people who do not like new things, who do not like change, who do not like something different, who want the old way of doing things. It is new, it will take a while for people to get used to the idea that we do not have to agree on everything but we can nonetheless work professionally together in the national interest.

I think we will confound a lot of the breathless scepticism that is about at the moment. One final point I would make is that we are almost halfway through this five-year Parliament. Clearly we have faced much more serious economic headwinds than we could have possibly expected over two years ago. It is no wonder that there are some people who lose their nerve a bit at this stage. I certainly think I can speak for both of us; we are not going to lose our nerve.

Prime Minister

One last point, on the issue of coalition; there are some people who have never liked the idea of a coalition government; who did not want the Conservatives to go into a coalition; people who did not want the Liberal Democrats to go into a coalition. The question I would ask some of them is: ‘In a world of uncertain markets, huge difficulties in economies right across Europe, massive challenges that governments have to meet - does anyone think that we’d be better off with a minority government that could not carry its legislation, that could not make rapid decisions, that could not implement those decisions?’

Even if you are not an enthusiast for the fact that Conservatives and Liberal Democrats have put aside some of their differences and I think have a very packed and exciting programme - even if you are not an enthusiast for that, you must see a case for the fact that in difficult times, challenging economic times, having a government that can make quick decisions, implement those decisions, carry its legislation, is actually vitally important for taking Britain safely through these difficult times.

##Question

Can I ask you when is it time to sort out the security fiasco with G4S? How can it be solved? How many more soldiers might have to give up their valuable summer break to sort it all out?

##Deputy Prime Minister

I would simply say, it is being sorted out, it will be sorted out, and we will deliver a secure Olympic Games. We both sit on a committee that the Prime Minister chairs, which has been looking at all of these issues for months and months and months. We planned for the contingencies where this might be a problem and we are now addressing it.

I totally understand; it is quite right that people have lots and lots of questions about who knew what when and all the rest of it. The key thing is that will we deliver a world-class Olympics to world-class security standards and we will.

##Prime Minister

First of all, let me pay tribute to the soldiers who are going to do a great job of making sure we deliver a safe and secure Olympics. As Nick has said, we will deliver a safe and secure Olympics. All of these areas of potential problem, whether it is traffic, whether it is Heathrow, whether it is venue security, we have been monitoring through this steering committee right from the moment this government came to power.

Obviously with the Group Four Security issue, the G4S issue, the full extent of that did not come to light until relatively recently as they were going through the final stages of hiring the temporary staff. I am confident; as Nick said, we had contingency plans, we are using those contingency plans, and we will do whatever it takes to deliver a safe and secure Games.

##Question

West Midlands Police has also sent 180 officers to cover the Olympics for G4S further weakening their frontline. Would West Midlands Police be able to deal with riots after seeing the force cut by 1,000 frontline officers? Has the government cut too far?

##Prime Minister

I do not believe we have. We have asked police forces to take difficult decisions because of the budgetary situation that overall we face. I think what has been impressive, in the way the police force has responded, is that we are seeing the percentage of police officers on frontline duties actually go up.

If you look at what chief constables are saying, by and large they are saying, ‘Yes, we’re being asked to do difficult things. But there are savings we can make, there’s focus on the frontline we can put in place.’ I am very confident that they will be able to cope with any situation that might occur.

##Question

I just wonder if I could ask about another branch of our transport system. Another area screaming out for new capacity is the airways. I just wondered, now more than ever, with businesses asking for more capacity in our airports, isn’t it time to admit that we need a third runway at Heathrow?

##Deputy Prime Minister

Well, as you will know, we recently published a paper setting out some immediate changes which can maximise the capacity of our airport infrastructure and consulting on a number of issues. We will be publishing a call for evidence on the so-called hub capacity in a few months.

This is not, like so many other issues we have already dealt with this morning, susceptible to an immediate solution. It is a big issue that we need to address as a country. There are lots of very strong views on all sides of the debate and we will be very keen to hear what people’s views are once we issue that call for evidence.

##Prime Minister

That is absolutely right. Do not underestimate the extent to which high speed rail can assist with this over the long-term. I think that if all the places that could be met with high speed rail were, you would take about 20% of the flights out of Heathrow. That is part of the answer, as is today the announcement that there will be the western hub for Heathrow, which is important too.

##Question

Will the midterm review be another coalition agreement? Or will it be a slimmed down document? Has work started? Secondly, what odds would both of you give on the coalition lasting to 2015?

##Prime Minister

It will be a slimmed down, it is not going to be a full coalition agreement. The coalition agreement covers every area of policy; it is very, very detailed. There is a lot left to do and even more left to implement. One of the big focuses of government right now, and one of the big focuses of mine is actually making sure that whether it is the introduction of free schools, universal credit, single-tier pensions, the rebalancing of the economy, the National Loan Guarantee Scheme - you know, these things are happening on the ground and are absolutely vital.

So, the document will be, as you put it, slimmed down; it will be a midterm review looking backwards at what is achieved, what we have done, what is still left to do from that and then highlighting the themes going forward where I think there is real momentum. I mentioned some of them; Nick mentioned some of the others. I am not a book-maker. I am not a big betting man, but I would not bet against it.

##Deputy Prime Minister

I put a considerable amount of money on us seeing through until 2015 because that is what we are committed to doing and that is what we will do. As David said, the midterm review is not another great tablet of stone as per the original coalition agreement, but I think it will be a really useful reminder when people see it of quite how much we have done and packed in in two and a half years and what is left to do.

I think one of the things I have certainly learned in the last couple of years is that people get so bound up with the latest squall, the latest controversy that it is good sometimes to just step back and say, ‘Look what we’ve achieved. What does that do for the country? What are we delivering successfully or not?’

I think there is a legitimate issue always about when governments make announcements, are we also being as zealous in making sure those are being implemented? We are very much focussed now on delivery as well in the second half of the Parliament, and all of that will be reflected in the midterm review.

##Question

You are in the heart of the manufacturing sector in the UK here. We are very keen indeed to see the railways succeed, and good news we have today and good news Prime Minister that you are supporting HS2 as well, because we see that as a major, major breakthrough for us for the future for our economy. Could you give me an undertaking or review on how the contracts will be given out, because we lost Bombardier and there is some nervousness around whether these contracts will go foreign or stay in the UK?

##Deputy Prime Minister

The transport secretary and the business secretary at the time of the Bombardier controversy, which I totally understand - of course, particularly for the people of Derby - was a real blow. You will understand that was a tender and a contract that had been launched under the previous government and under fixed rules that we could not reopen.

We have looked at the tendering rules, particularly under European Union rules, to see how much we can ensure that there is a proper level playing field for Great British companies, and I think that will be very fully reflected in the way in which these tenders are administered, published following the announcement we made today.

Can I just stress, not least of course as a constituency MP from Sheffield, that in the good times when government had pots and pots and pots of money, despite lots of good intentions and endless spending programmes, the North/South divide did not narrow; in many ways it got bigger and bigger. One of the things I think we have learned is that you have to make sure that there is the proper infrastructure to link different parts of the country, and we are still relying on infrastructure which in many ways has one foot in the 19th century.

That is the significance - one of the big areas of significance of today’s announcement: it is really hauling our railway infrastructure into the 21st century, which I think could play a big role - not in and of itself enough - but play a big role in healing that terrible scar, that North/South divide which has disfigured our economy for far too long.

##Prime Minister

I think it is one of the government’s best kept secrets that actually we have an incredibly active industrial policy. We really want to see this economy rebalance. It is a great moment to make this point in the West Midlands - the heart of Britain’s auto industry; Britain is a net exporter of cars for the first time since 1976. I think I have been to almost all of the main car plants in Britain over the last two years  Nissan, Honda, Jaguar - they are all performing absolutely out of their skin, producing more, extremely competitive, extremely efficient.

Whether it is the expansion of apprenticeships that the Deputy Prime Minister spoke about; whether it is getting behind our exporting industries where we have led trade missions all over the world; whether it is actually providing the infrastructure that manufacturers need; whether it is boosting our universities; whether it is setting up these catapult technology transfer centres, in every area we are really committed to helping bring about that rebalanced, pro-manufacturing, pro-exports, pro-technology economy.

The only thing I would add on Bombardier is that, just as businesses need to be better customers to their supply-chains, if they really want to be a great just-in-time manufacturer and deliverer, frankly government should be a better customer. We should be talking to key suppliers, like Bombardier and other companies with big bases in Britain, about what are our technology and infrastructure needs for the future, so that when the new contracts are coming up they know what’s coming; they are like a partner with us.

That does not mean that you are breaking any European rules about competitive tendering and all the rest of it, but you should work with your key suppliers so they know what is coming down the track and they can help you to deliver it.

In terms of what we are talking about today, the purposes, the mission of the government, the rebalancing agenda that is absolutely vital - it is hard and painstaking work when you are recovering from economic problems as deep as we had them. It is hard and painstaking work, but it is absolutely vital and we are very much committed to it.

Can I thank you all very much indeed for coming, and thank you for our host today and hope that you are going to be a big part of this rail revolution that we hope to expand and invest in. Thank you very much indeed.

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